Question

1. Normally, what level of ownership of the voting stock of another company is considered enough to give the investor control?
   1. 20%
   2. Exactly 50%
   3. More than 50%
   4. 80%
2. The type of business combination where one of the two original companies continues to exist is called for legal purposes a
   1. Statutory merger
   2. Statutory consolidation
   3. Variable interest entity
3. The method for accounting for business combinations that is now required under GAAP is the
   1. Purchase method
   2. Pooling Method
   3. Acquisition Method
   4. Cost method

Answer 1

Solution 1:

Normally more than 50%  level of ownership of the voting stock of another company is considered enough to give the investor control.

Hence option c is correct,

Solution 2:

The type of business combination where one of the two original companies continues to exist is called for legal purposes a "Statutory merger"

Hence first option is correct.

Solution 3:

The method for accounting for business combinations that is now required under GAAP is the "Acquistion method"

Hence option c is correct.